The figure below shows the market for cotton. Suppose that the cotton growers use a chemical to control insects and waste flows into the town's river. The marginal social cost of producing the cotton is double the marginal private cost. Price (dollars per ton) $18,750. $11,250. $20,000. $15,000. 150 125 100 75 50 25 O 100 200 S 300 400 500 Quantity (tons per month) If the town owns the river and taxes cotton growers so that the efficient quantity is grown. How much tax revenue does the town receive?

The figure below shows the market for cotton. Suppose that the cotton growers use a chemical to control insects and waste flows into the town's river. The marginal social cost of producing the cotton is double the marginal private cost. Price (dollars per ton) $18,750. $11,250. $20,000. $15,000. 150 125 100 75 50 25 O 100 200 S 300 400 500 Quantity (tons per month) If the town owns the river and taxes cotton growers so that the efficient quantity is grown. How much tax revenue does the town receive?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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